Net-Delivered Pay TV Subscriptions Slow

U.S. internet-delivered pay TV providers' subscriptions are witnessing a slowdown in growth, with total pay TV subscribers -- traditional and virtual -- declining overall.

Total subscribers of virtual multichannel video program distributors (vMVPDs) rose 737,000 in new customers to 7.6 million in the fourth quarter of 2018, according to MoffettNathanson Research.

This is down from the 900,000 gain in the fourth quarter of 2017.

Craig Moffett, senior research analyst of MoffettNathanson, points to competition -- such as Netflix, CBS All Access and HBO Now -- as major reasons.

“None of these are positioned as replacements for traditional or vMVPD subscriptions, but it is reasonable to assume that some customers will have cobbled together entertainment packages that are non-live, but are, well ... good enough,” he writes in a note. “Second, it is likely that some measure of pent-up demand has been satisfied.”



He says some portion of the vMVPD subscriptions being sold is attributable to customers who cut the cord years earlier, when vMVPDs didn’t exist. "It could be that one-time boost to the market is now running off, making visible what is in reality a much lower underlying conversion rate."

Sling TV was at 2.4 million subscribers at the end of 2018, according to company reports, up 47,000. Moffett estimates Hulu with Live TV at 1.7 million; DirecTV Now, 1.5 million; and YouTube TV, 1 million.

Sony PlayStation Vue, Hulu Live, YouTube TV, and fuboTV are estimated to have added a collective 970,000 subscribers during the fourth quarter -- with DirecTV Now declining 280,000 -- mostly due to the expiration of special promotions offers.

MoffettNathanson says there were 96.6 million total U.S. pay TV subscriptions -- a 1% decline (248,000)  from the 97.1 million in fourth quarter of 2017. It says the total number of traditional pay TV subscriptions -- cable, satellite, and telco -- was down 4% (985,000) to 89.1 million.

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